The Difference Between For-Profit and Non-Profit Leadership
It's a big difference that leaders need to understand...
One thing that’s critical in leading a non-profit organization is the understanding that business leadership is often quite different from non-profit leadership. Jim Collins calls it the difference between “executive” and “legislative” leadership. In a business – particularly a privately owned company – the chief executive drives the train. He or she makes the decisions and, at least from an authoritative point of view, those decisions are the bottom line.
But in most non-profits – particularly in a church or ministry setting, leadership involves building coalitions, assembling teams, and bi-lateral cooperation. I grew up as a pastor’s son in a small church in Charlotte, North Carolina. I watched from the front row as my father had to deal with the Elder board, church committees, deacons, and other influential members in order to make decisions happen. He became an expert at building coalitions and “working the room.”
Today – particularly in independent churches and ministries, I often see more executive style leadership, and this isn’t necessarily a bad thing. In a non-profit founded by a single person with a clear, unified vision, a board usually exists, but it’s often little more than an advisory group – especially when the ministry is built around the testimony or calling of a particular person. Sometimes this happens when the organization begins as a small “mom and pop” ministry, and over the years grows into a national outreach.
There’s a couple of different viewpoints on the issue, and I do believe that a visionary leader of a church or ministry shouldn’t be held back by an obstinate board or disgruntled church members. If he or she has been chosen for a leadership role, I’ll usually default to their decisions. Especially when accountability measures are in place, I’m often comfortable giving them wider latitude in church or ministry leadership.
But I’ve also seen that latitude horribly abused by egotistical leaders, who live lives of moral compromise under the auspices of “prophetic vision.” They get a bit too used to the power, prestige, and financial incentives of national ministry leadership, and use their position as ruler more than leader. Some of course have caused great damage to the faith, through moral, financial, or leadership abuse.
The key is understanding that in most ministry situations, we can’t simply copy leadership from a business perspective. When legislative leadership is required, we need to understand the difference and act accordingly. Perhaps the greatest test of a leader is is understanding that difference.
Have you been in situations with leaders who didn’t know the difference?
Phil Cooke, PhD. has been called “one of the most innovative communicators of our generation.” As a media producer, writer, speaker, and consultant, his client list includes major film studios and TV networks as well as major Christian organizations like Voice of the Martyrs, The Museum of the Bible, The Salvation Army, and others. He’s also coached and consulted with many of the most influential churches and nonprofit organizations in the world, helping them use media to tell their story. You can hear his podcast here.
